Two of our operations — Troilus and Ok Tedi — produce gold.

There are two main kinds of gold deposits:

• lode or vein deposits, where gold is found in cracks and veins in rocks
• placer deposits, which are formed by moving water that has eroded gold out of lode deposits. When the speed of the water in a river slows sufficiently, the heavy gold falls to the bottom and accumulates in the sand of the riverbed.

How it’s mined and produced

Gold can be mined underground or in open pits. It can also be mined as a by-product of copper and silver mining.

Gold is so valuable that it’s worth the effort to recover even minute amounts from copper and silver ore. Our mine at Troilus, for example, has less than one gram per tonne of ore, or less than one part per million.

How it’s used

Gold's physical and chemical properties make it ideal for a number of applications. It's also very stable and doesn’t corrode or rust. Gold conducts electricity and heat very well — only silver is a better conductor of electricity.

Gold is very malleable which means it can be hammered into shapes or even sheets so thin that light can pass through it. It’s also ductile, which means it can be drawn into long, thin wires.

It’s mainly used in:

• dentistry and medicine
• jewelry and arts
• medallions and coins
• ingots as a store of value.

It’s also used for scientific and electronic instruments and as an electrolyte in the electro-plating industry.

The graph below shows the use of gold by market sector.

Supply vs. demand

In 2007 total identifiable demand for gold rose to 3,547 tonnes; an increase of 4% in terms of quantity compared to 2006. Gold supply was tight in 2007, falling 3% from 2006 levels to 3,469 tonnes. This was due primarily to a sizeable 15% drop in gold scrap and a modest decrease in mine production.
 

Our gold business

Troilus produces gold doré (bullion), which we have toll-refined at refineries in Canada and sell in the market. We sell approximately 70 percent of the gold produced at Troilus as gold contained in copper concentrate.

Ok Tedi produces gold recovered from the gravity circuit as gold doré, which we sell to refineries.

Gold prices

The graph below shows the change in metal prices over the last several years.

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